But late yesterday, commerce minister Anand Sharma said that the investment board had cleared the plan. “This is a positive development,” Sharma said. “The government is committed to playing a constructive role in encourage foreign direct investment.

IKEA had told the Indian government the company must be allowed to retain its “global model” in India, retailing all of its products and running its in-store restaurants as it does in every country where it has operations.

Reacting to the announcement, IKEA said the clearance of its proposal by the foreign investment panel “as per the IKEA concept” was “an important milestone in the application process”.

“We consider this as a very positive development,” Juvencio Maeztu, IKEA country manager, said. “We are now awaiting for approval from the cabinet and subsequently a notification so that we can initiate the process of establishing IKEA stores in the country,” Maeztu said.

Clearance from the Indian cabinet was expected to be forthcoming after the commerce minister said late last month that “we accept their global model” and “we see no reason why their global model has to be changed in any manner.”

IKEA’s entry into India — it has pledged to invest $1.9bn in coming years — is being closely watched as a test case for how a large foreign corporation negotiates India’s byzantine rules and red tape. AFP